Survey Shows Almost Half of S’pore Small Businesses Not Accepting Cash as a Payment Option

By
Shernice Sim
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It’s no secret that Singapore is a high-tech hub, but what’s really taking off lately is the shift to digital payments.

Gone are the days when your wallet bulged with cash. Now, it’s more likely to be your phone that is doing all the heavy lifting when it comes to payments.

According to a recent survey by small business platform Xero, younger generations are the ones leading this charge, dragging the rest of us along towards a cashless society. 

And here’s the kicker: while 79% of Singaporeans still like to keep some physical notes and coins on them, over half of the small businesses in the country have decided to ditch cash altogether.

Why Carry Cash When Your Phone Will Do?

The move towards digital payments is being driven by a perfect storm of government initiatives and a general obsession with all things digital. 

As a result, most Singaporeans are now whipping out their credit or debit cards to pay for everything from mala to bubble tea. In fact, 76% of us use these cards regularly, and more than half are all about PayNow or good old bank transfers.

Even GrabPay and Buy Now, Pay Later (BNPL) platforms are having their moment, with roughly 22% and 21% of the population using them, respectively.

For the younger crowd, especially Gen Z, digital is practically the default. Nearly 68% of them prefer PayNow, while about 29% are big fans of GrabPay. And get this: 30% of Singaporeans don’t even bother carrying a wallet anymore. They’re perfectly happy relying solely on their phones for payments.

This is way above the global average of 21%, so it’s clear that we’re ahead of the curve in this digital game.

On top of that, 51% of small businesses in Singapore have decided that they are done with cash. They are now the least likely among businesses in several surveyed countries to accept physical money.

This has led to a bit of a mismatch. Imagine strolling into a hawker stall you’ve been wanting to check out for a while, only to find out they do not take cash, just when you’ve got a crisp S$10 note in your hand.

It’s a bit of a jarring experience, and Xero’s research suggests it could be bad for business. Apparently, 18% of Singaporeans would happily take their business elsewhere if their preferred payment method isn’t accepted.

So, if your local food court decides to go all-in on digital payments, they might be risking more than just a few grumbles from the aunties and uncles.

On the flip side, small businesses that have embraced new payment methods are reaping some solid benefits.

According to Xero, nearly nine in 10 businesses that switched up their payment game in the last six to 12 months have seen improvements. We’re talking faster payments, more customers sticking around, and even a boost in sales. Sounds pretty good, right?

These businesses also claim to be looking forward to even more futuristic payment options, like biometric authentication (think fingerprints and facial scans), bartering apps, and augmented reality.

A surprising 31% are even excited about the idea of implantable payment chips. Yes, you read that right—payment chips you could one day have inside your body, like in the movie In Time!

And while that might sound a bit too sci-fi for some of us, it’s clear that these small businesses are keen on staying ahead of the curve.

What’s Next? A Balanced Approach Might Be Key

So, where does this leave us? Singapore is definitely on the fast track to becoming a cashless society, but it’s not quite there yet.

In fact, despite the strong trend towards digital payments, cash is far from dead.

Nearly eight in 10 Singaporeans still like having the option to use physical money. Whether it’s out of habit, nostalgia, or just because they like the feeling of cold hard cash, it’s clear that cash isn’t going anywhere soon.

While the convenience of digital payments is undeniable — seriously, who wants to stand there counting coins in this heat? — there’s still a significant chunk of the population that isn’t ready to give up on cash just yet.

For small businesses, the key might lie in striking the right balance. Offering a variety of payment options could be the secret sauce that keeps customers happy and coming back for more. 

As Singapore continues its journey towards a fully digital economy, it’ll be interesting to see how both businesses and consumers adapt.

For now, whether you’re team cash or team cashless, one thing’s for sure: the way we pay is changing, and it’s happening faster than you can say “contactless”.

And maybe we should pray that we don’t get another internet banking outage like in back in May.

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Shernice Sim